Many advisors devote significant time, energy and resources to business development, only to find that their rate of growth remains “stuck.”

As marketing and business development consultants, the team at Select Advisors has found that advisors’ frustrations often stem from inaccurate assumptions about where and how to focus their efforts. We believe that identifying and clearing away these unrealistic expectations and misconceptions is necessary to create an effective growth strategy.

The misconceptions are remarkably consistent from firm to firm. Among the most common:

A single ‘linchpin” referral source exists. Many advisors believe that a custodial firm, a center of influence or perhaps an industry group can be tapped to provide a library of quality leads—that it’s just a matter of finding this motherlode. That may have been true to some extent in years past. But as the RIA field has grown more crowded, any source with valuable referral lists is now using them directly to their own benefit.

Off-Shedding sales to a junior team member can be effective. Firm leaders often believe that delegating a dedicated individual to drive sales can be effective. The truth is that high-net-worth investors rarely wish to deal with a cold-calling junior team member. Prospects prefer to deal with the firm’s founders, partners, or senior managers, who have the standing to command their respect.

Existing clients can drive referrals. Many advisors believe that if they do good work, satisfied clients will refer their friends and associates. This is true to some extent, but it’s a passive strategy, and without pre-existing scale, it fails to gain traction: The fewer (and/or older) clients you have, the weaker this machine will be.

Investment can follow results. Marketing and business development firms don’t operate based on finders’ or performance fees. They require up-front investment of time and energy to help you source leads and grow your practice. One analogy: You expect to get paid as an advisor even if your clients’ portfolios go down. Marketing partners face the same economics.

Advisors alone can drive sales. RIA firms frequently overlook some of the people who are best positioned to identify and attract assets. With proper coaching, receptionists, traders, support-team members and others can begin to recognize and pursue asset-gathering opportunities.

COI relationships are built in a brief period. Lunch with an intermediary rarely results in immediate referrals. In fact, it takes on average 18 months from the first meeting before a COI (lawyer/accountant) feels comfortable to send you a referral. Advisors must view a face-to-face meeting as no more than a start. To remain top of mind, successful advisors follow up consistently—sending personal notes, forwarding relevant articles and blogs, extending invitations to events and so on.

Twitter is an effective prospecting tool. Many advisors enlist social media experts to help launch Twitter and Facebook strategies. The statistical evidence shows that this approach is rarely worth the investment. A high net worth individual is not going to hand-off their lifetime of savings and investments to someone they found on Twitter.

They have grown without any marketing. Most RIAs come from global platforms where tens of millions of dollars are spent annually on marketing. They fail to recognize that the marketing budget came directly from revenue that they generated. At wirehouses, growth depends largely on marketing. It’s no different for breakaways.

A brief marketing campaign should bear results. Successful marketing isn’t a one-year commitment. It’s an ongoing process of raising your profile, cultivating relationships and honing your ability to zero in and close new clients over a business cycle. Successful advisors invest in ongoing marketing just as they invest in ongoing office space and utilities. Just like advisors tell an investor that performance should be judged over a 3-5 year cycle, marketing and sales work the same way.

Select Advisors Institute is a consulting firm that works with investment management firms who are looking for our expertise and advice in growing their practice.